Question

The following is a completely new scenario. Let’s assume a Company which is currently privately-held is considering an Initial Public Offering (IPO). The Company has been closing its books every month end in the past and performing typical financial statement analysis on these monthly results, including budget to actual comparisons in the past. You are in-charge of both the Accounting Department and all IS activities related to the functions performed by the Accounting Department. The CFO walks into your office one day in the middle of the month, and asks you can you close the books for the month end which ends in a few days in 5 days instead of the normal 10 days it takes to close the books and make all required monthly journal entries, including deferrals and accruals. The reason for this accelerated closing is the Underwriter’s for the IPO want to evaluate the Company’s latest financial results before negotiating the price per share for the common stock to be sold in the IPO. Be specific on how you would go about organizing and meeting the CFOs request to close the books within 5 days instead of 10 days.

Answer 1

The given situation is a common Corporate Situation where Head of Accounts Department(or any other department) is asked by Senior Management such as CFO to accelarate the reporting work or submit reports relating to some task or work.

As an Accounts Head,we should take this as an opportunity as well as challenge get the work done faster. For this purpose, the best route is to Form a Task Team of Employees who will execute this task.

Now among the Task Team, work shall be distributed as per each person's expertise and capablity. Their work shall be closely monitored by us. They shall also be provided with Bonus or Overtime Pay so as to Motivate them to work effectively to execute the Task on time.

By this way, the Acconts Head can organize and meet the CFOs requirement.